TransUnion CIBIL Limited (Formerly known as Credit Information Bureau (India) Limited) is the leading credit bureau and Credit Information Company (CIC) in India. The primary function of CIBIL is to collect and maintain financial data as provided by the lenders to further generate and provide credit reports and credit scores for its customers. The credit score offered by CIBIL ranges between 300-900, wherein any score of 750+ depicts responsible and good consumer behavior that further helps individuals avail credit at lower interest rates with additional benefits.
In the following sections, we will discuss key details about India’s leading Credit Information Company (CIC) TransUnion CIBIL and its role in the borrowing or lending process.
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Role of TransUnion CIBIL in the Lending Process
TransUnion CIBIL is a RBI licensed credit bureau that is authorized to collect and maintain consumer information as provided by the financial institutions to generate credit reports for both individuals, as well as companies. These credit reports play a crucial role in the approval or denial of credit applications for new credit, such as loans and credit cards. The details of this process are as follows:
- Financial institutions, such Banks/NBFCs submit the credit data or consumer information of individuals and companies i.e. details of their past credit behaviour, including account details, outstanding loan amount, repayment trends, existing loan/credit card information, enquiries etc. on a monthly basis to CIBIL
- CIBIL collates this data and uses its unique statistical algorithm to calculate and generate Credit Information Reports (CICs) for individuals that include CIBIL Score (300-900) and Company Credit Reports (CCRs) for companies that contain CIBIL Rank (1-10)
- Lenders can check the CIBIL report and CIBIL Score/CIBIL Rank to evaluate the risk of lending to applicants and accordingly approve or reject new loan/credit card applications
- Applicants with good CIBIL score are preferred by lenders and are eligible to avail loans at low interest rates, as well as instant credit card approvals. Individuals with low CIBIL score may able to avail fresh credit but at higher interest rates with lesser benefits.
Suggested Read: Reasons for Rejection of your Credit Card Application